Is the job market still hot? What you need to know in 2024

The labor market is a huge indicator of how the U.S. economy is performing. Julia Pollak, Chief Economist at ZipRecruiter, joined TheStreet to discuss the state of the job market and why those seeking employment may have to try a bit harder than in recent years.

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CONWAY GITTENS: How would you characterize the labor market right now. Would you say that it's healthy or in need of a little bit of patch work?

JULIA POLLAK: So I would say overall, it is still quite healthy. Layoffs and firings are very, very low. We see that from a number of different data sources. Jobless claims are low. Mentions of job cuts in earnings calls have been declining. So this is still a strong economy, but it is different from what we had before the pandemic and it is slower. So companies are slower to hire. They're also slower to fire and workers are being slower to switch jobs right now. There may be some good in that. Sometimes if you stay in a job longer, you become more productive there. Companies aren't having to battle so much turnover, but it also might mean that we've become a bit less dynamic.

CONWAY GITTENS: So the latest data shows that there's 1.2 jobs for every job seeker. Is it still a job seekers market or has the balance now tipped for the employer?

JULIA POLLAK: Well, we've actually returned to the pre-pandemic level of labor market tightness if you use that measure. And remember, before the pandemic, we thought this was a very tight labor market. I mean, that's tighter than at any point in the prior 10 years. So it's still a strong labor market. Look, if you're a job seeker, a worker and you're comparing what's happening now to what happened in the middle of 2021, late 2021, you'll be disappointed, right. No one's rolling out the red carpet for you anymore and offering you a massive signing bonus and raising starting pay at the rate that they were doing so in 2021 when there was just a dogfight for talent. That was unsustainable. That was a once in a lifetime situation.

CONWAY GITTENS: And when you look at the postings. On ZipRecruiter. What is the story that's coming from the jobs that are being posted, the kind of companies that are doing the posting and how long it's taking for them to fill the post?

JULIA POLLAK: So story number one, there was a two year decline in job postings from, you know, mid 20, 22 onwards to now. But that has now stabilized and we're actually seeing job postings hold steady and tick up in May. The other story is that the number of applicants keeps rising. So we are seeing that labor supply is expanding and which that means the labor competition is also expanding. So it is getting more competitive out there and many jobs are seeing ten, 20, even 30% more applications per posting than a year ago. And that means if you're out looking for a job, you really need to put your best foot forward and be very competitive when it comes to different industries. And we haven't really seen tech turnaround yet. Hiring is very flat and pretty slow, but there are huge pockets of strength in AI, for example, and health care is the big story. But there are other places where we're seeing a lot of hiring, too. One, this is an election year, so safety and security are big issues. So actually the most in-demand skill right now is law enforcement related skills. Lots of police hiring is taking place as local and state governments recover and catch up.

CONWAY GITTENS: So I'm wondering, tech overperformed, right. During the pandemic. They did so much hiring and that's why we're seeing the retrenchment. Is there a flip side to that. Is there a sector that underperformed during the pandemic and now they're kind of returning to normal or outperforming?

JULIA POLLAK: Yes so mean reversion is a major story. The industries that did very poorly during the pandemic, nursing homes, child care centers, those are all showing very strong job growth. Now they've either fully recovered or are on the verge of recovering. And the industries that did well were companies were expanding headcount 30% to 50% during the pandemic growth. There has been flat 0 for about a year now.